EA Craftsman's EA Course【008】Why use EA? Benefits & drawbacks of automated trading

Advantages

• Not influenced by emotions
You won’t worry about entries or exits. In discretionary trading, even with rules in place, there are subtle moments like “Hmm? which way is this?” that can cause doubt, but automated trading has none of that.
• Never miss opportunities
Because it trades according to 24-hour rules, you won’t miss chances.
• Testing is easy
Long-term backtests spanning many years, such as 10 years, can be done in an instant.
In discretionary trading, you might use backtesting tools like FT2 (Forex Tester 2), which takes time. With EA, MT5 or MT4 can finish it in an instant, so it’s powerful if you want to try various methods.
• Less stress
You don’t need to stay glued to charts, making it easier. Compared to discretionary trading, it reduces stress. As a result, losses won’t lead to emotional reactions like “I’ll revenge-trade!” affecting your next trade.

Disadvantages

• Costs such as electricity
You must keep the device running all the time. You either leave the PC on or contract a VPS.
However, MT4 doesn’t require high specs, so you can prepare a small notebook for automated trading without issue. The monitor can be closed and the app will still run, so power consumption isn’t a concern.
• Inflexibility
Even a single W-bottom pattern requires a precise definition in the program.
• You don’t develop market intuition
Just like entrusting money to a fund or someone else to manage, your own market sense and trading skills don’t easily improve.
The skill of operating EA may improve somewhat, but for methods like the semi-automatic trading I mentioned in the sixth lecture, improving performance requires market intuition, so relying solely on automated trading can be problematic.
• 〇〇 shock
Even with unexpected price moves due to indicator releases or statements by key figures, trading proceeds without regard to them.
For indicators with known dates, you can manually stop trading or pre-program to avoid that time window, allowing trades to continue otherwise.
In cases like wars, conflicts, or extreme currency interventions where prediction is extremely difficult, there is little you can do; but this is the same for discretionary trading, so it isn’t a unique disadvantage of automated trading.

■ My developed EA concept and operating policy